My Financial Picture: Putting It All Out There

Yep, I’ve put my credit card on ice, baby. As in permanent ice. If you have a problem with your credit card usage, I highly recommend freezing it as an tool for helping you to not use it.

I’ve been trying to figure out a realistic budget, given the fact that my paychecks differ from pay period to pay period, being an hourly person. (Wow, that’s hard to get used to, let me tell you.) I’m used to being paid every two weeks, and calculating my expenses on that 24 paycheck schedule, with those two lovely bonus months of 3 paychecks occasionally being thrown in. I lived for those months and what I could do with that extra paycheck. Usually it went to paying down debt/student loans.

I know some people get squirrelly when it comes to talking about salary but it’s not secret what the starting pay is at my job. It’s $12/hour. Once November 1 hits, I will have insurance through work, but I believe the amount of my premium will change come January 1, 2016. So I’m basing these numbers on what I know for the rest of 2015.

So I’m just going to put it all out there and to make life easy, I’m going to round numbers to the nearest dollar where I can. We get paid twice per month, on the 1st and the 15th. The 401(k) contribution is always 3% of the paycheck (they have an automatic opt-in plan, which I really like.) So, here are the various amounts that could be subtracted, per paycheck amount.

Gross Pay for 80 Hours Worked = $960 [401(k) deduction would be $28.80]
Gross Pay for 88 Hours Worked = $1,056 [401(k) deduction would be $31.68]
Gross Pay for 96 Hours Worked = $1,152 [401(k) deduction would be $34.56]

I do get life insurance through work but at no extra charge to me. Since I don’t have any human dependents, I’m fine with this and not getting any additional coverage. Based on past paychecks, it looks like I get taxed at about 21%. (Ridiculous, right? Considering how little I make. I need to move to Europe, I tell ya. At least there I could get something out of all the taxes I pay.)

So, possible net paychecks for a single pay period could be (after deducting insurance premiums, 401(k) contributions and taxes):

Now, when it comes to budgeting, or planning out how much extra i can put toward paying down my RV and car loans, you can imagine I want to plan for the worst case scenario, so I’m going to try to calculate based on having two of the smaller, 80 Hour paychecks. If I were to budget at the lowest amount, my net take home pay per month would be $1,367.32. Yep, that would be a very lean month. At the middle amount, my net take home pay would be $1,514.44. At the high end, my net take home pay would be $1,661.58.

Expenses (fixed):

Rent = $215

RV Loan (minimum) = $82

Car Loan (minimum) = $142

Cell Phone = $60

Netflix = $8

Recycling = $15

LAL Student Loan = $167

Navient Federal Loans = $91

TOTAL fixed expenses = $780

Expenses (variable – these are my best estimates):

Electric = $80 (keep in mind, the base rate is $22, and the lowest bill you can get is $35, before you even turn anything on. It’s ridiculous.)

Propane = $10 (I hope to use little to none with all of my other electric options. I’ve also already paid for them to fill up my residential tank with 80 gallons.)

Food/Groceries = $250 (this is a very hard expense for me to keep in check but I’m trying my best as of now.)

Gas = $120 (from one of my prior posts, you know this is also kind of like an entertainment type of expense as it allows me to go check out various national parks)

Pet Food = $125 (this was based on when I had Sebastian, so 5 cats and 1 dog. I expect it to go down about $25 now with just the 4 cats and Osito.)

Estimated Variable Expenses Total = $585

Hm, that makes my total between just those two categories = $1,365. That gives me a whopping $2.32 left over. Let’s hope a month never sees two of the smaller types of paychecks, since I hadn’t even figured out the expenses below into that tally.

Wow, that’s scary. That is the first time I’ve added up those three loans and looked at them square in the face. I feel like that student loan has been around long enough to be a child of mine, and really, it is. So the RV loan and car loan are my first priorities, unless I see signs pointing to the interest rates starting to creep back up again. I believe my LAL Loan rate goes up and down based on the LIBOR Rate.

Long time readers of the blog will notice I’ve not included the Big Daddy Loan in that list of loans that have to be repayed. That’s because under the new Income Based Repayment Plan, whatever is unpaid after 25 years (groan), will be forgiven. I don’t expect to make enough money going forward to ever pay that loan off in total (but believe me, I’ve already paid back the balance and then some….don’t even get me started on the topic of student loans). So I’m just treating it as a utility payment of about $91/month. (For those of you not familiar with my Big Daddy Loan, read this.)

If you’re not a longtime reader, and you think I’m a deadbeat for going with the IBR plan, well, just know this. I have paid at least $500-700/month on these loans for as long as I can remember. I’ve been paying them back for about 17 years now. The balance of the loan is still around $97,000. It’s more than what it was to start, trust me. The interest capitalized when I couldn’t afford to pay it, and just know that for the past few years, all I paid was interest on the loan to the tune of $538/month. That’s over $6K in interest per year, just to keep it from growing. Would you like to live like that?? I think not. Ok, rant over….

Retirement Funds:

This is something which I think I’m ok with, based on how much I have saved in the past at my higher income. I know the worry these days is that so many people haven’t saved enough. I’ve got about $140K (it goes up and down with the market so I try to not constantly be monitoring it) in my retirement accounts, and luckily, I can’t reach any of it!!

Emergency Funds:

I’m at the lowest amount I want to go to, regarding emergency funds. At the advice of a reader to a recent post of mine, I changed the nickname of my big online savings account to DO NOT TOUCH (and yes, I did put it all in caps, too.) I’ve been trying to put about 65/paycheck into about three online savings accounts, by having it directly deposited into them.

I’m sure I am forgetting some kind of details but this is as much as I can think of right now.

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So Where Do I Go From Here, or what does all of this mean?

If you’ve actually made it this far into this post, (1) congrats and (2), you can see that if I were to have two lower amount paychecks, it’s a very thin tightrope I will have to walk. Luckily, I don’t expect that to be the case since we get paid on the 1st and the 15th. Just based on days included in a month, the check for the 1st should usually be the bigger one of the two. And so far, I’ve not had an 80 Hour Paycheck – they have either been for 88 or 96 hours.

I do plan on perusing my auto insurance policy to see if my coverage can be reduced in areas – I basically had them apply the same limits as I originally had in MA, which I have found to be one of the most restrictive states when it comes to auto policies. (Oh wait, imagine my *shocked face.* Please, note sarcasm in my voice.) So my guess is that my premium doesn’t have to be as high as it is, even though my car is a 2013 model.

I clearly need to make some cutbacks in the areas of food or gas. I would love to grow some of my own food but it’s too late in the year to try now, and I don’t have a ton of room to do something like that either. But I can definitely keep a tighter lid on myself when I hit the grocery store. Pet stuff — I might be able to cut back on if I’m smart about how I order it (from Chewy.com, a company I can’t say enough good things about). Please don’t ask me to cancel my Netflix account – it’s already ridiculously a cheap form of entertainment for me, and the Amazon Prime membership really comes in handy as well when you are living in a very small town.

So I think I might need to come up with another way to produce income. Writing might be one way. Becoming an Amazon affiliate might be another. Getting a part-time job is yet a third option. These are just some of the things I think about, daily. And yes, in October, I’ve been trying to keep track of what I’m spending, whether it’s with cash or a debit card, etc.

Have you ever had to live on a really tight budget? If so, how did you do it? And even if you haven’t, but reading through my post, you sensed you could give some good advice, by all minds, advise/suggest away!!

Thank you, as always, for reading, and if you’ve liked it, please hit like or subscribe!

19 thoughts on “My Financial Picture: Putting It All Out There”

Wow, that IS tight. I’ve always thought living small was romantic…but I can see that as a practical matter it would take some thought and planning in order to cut out things I take for granted. You’re doing a good job of sorting it out.

Hi Dawn, yep, on the lower end of the paycheck, it is very tight. But at the middle and higher ends, it’s much better. I’m going to sell a few things that I am not using (printer, etc., why the hell did I buy it??) and I do know I can eat cheaper. I tend to indulge myself too much when it comes to food (think processed food, sometimes, and the natural foods store in town.) And I need to send an invoice for work I did for my author before I moved, so that will help too. 🙂

Wow you’re cell phone bill is low. Mine is kind of low too, at $86. But I was just surprised because now when I hear people talk about their cell phone bills they’re way over $100/month. My friend’s bill is almost the cost of my cable.

You’re brave. I make no attempt to add up my debt as it just might drive me into a panic attack. It amazes me how you can have payments on just about anything these days. Companies even want you to pay monthly for your cell phone (to pay it off)!

I’ve lived on a tight budget. For me what worked was keeping track of my spending. Luckily I haven’t been in a situation where I was in over my head, just with little room to breathe. So not shopping like money grew on trees helped, a lot.

Lea, thank you so much for commenting. And yes, my bill for my cell is low but it’s a prepaid bill – I don’t have a contract. And with Cricket, it used to be even lower, but living where I am, in the southwest, Verizon is known to have better coverage. Considering when you drive between towns sometimes, there is little to no cell signal service, I wanted to have the strongest one I could get, in case, God forbid, something bad happens.

I have to admit, after adding it all up, I have been feeling kind of down the past few days. It’s like, I can no longer think, “oh if I have a shortfall, I’ll just dip into my savings from when I had the other job.” Nope, now I need to adjust and live on the real salary I have, not the desired one. I do think that if I can keep track of my spending, and cut down on my grocery bill, and i know it can be done, I will be ok. I’m focusing on the positives.

And thank you – I’m either brave to put myself out there, or insanely stupid! 🙂

Terri, you have a better handle on your finances than most people. You asked for advice. I don’t think you need much advice, but since you asked, here’s my two cents worth.

I don’t see a realistic way to cut much from your budget. What I do see are other expenses that are not included in your budget. Things like RV and car maintenance, vet bills for five animals (my brother just spent $2,000 for emergency surgery for one dog), co-pay and deductible expenses for your medical needs, and on and on.

My advice is to look for ways to add a little extra income. I would look for multiple streams of income. Maybe one or more of those small-town country lawyers in the area could use the research ability of a hot-shot, back-east, Boston lawyer on a part-time basis. I know you’re thinking about writing. That can pay big time, but there’s no guarantee. Writing should be one of your streams of income. How about buying and selling things on Amazon, eBay, or CraigsList? Another possibility is to run the Facebook and other social media aspects of a few local businesses. A lot of businesses pay $200 a month to have this done.

Anyway, I would suggest you look for multiple streams of extra income instead of looking to cut expenses anymore. You’ve already done a great job of living within your means.

Hi Jerry, thanks so much for the advice, and yes, I realized after I hit publish on the post that I was not including stuff like maintenance, etc. I used to have money in those savings accounts but liquidated them to get the credit card paid off. I now have an emergency fund of $5K and I refuse to touch it.

The buying and selling thing on amazon – well, I don’t live anywhere close to a Walmart or place like that where I could buy any items to sell, and I know that I don’t have the seller’s stomach that I would need for it. But I do have stuff of my own that I want to sell on Craigslist and my small town has a pretty active facebook classifieds page that I plan on using.

How does one approach the companies to run their facebook pages? I’ve never done something like that before, honestly.

And I agree, I need to look for other sources of income, for sure. And thanks, I try to be as honest as possible.

First, I applaud your honesty about your situation. When I shut my business down a number of years ago, I thought my debt was around $ 100K. After a few weeks of adding everything up, it exceeded $ 160,000.00. I had no job and all of this debt. I was sick it had gotten that big. It took me 8 years, but I was able to clean up the mess I made.

I would advise you to put all of your debt down on paper (including the Big Daddy loan) and look at it and say it out loud, I owe $.

As to your budget, I think you are doing great, I would always look to cut (I once changed my cell plan to save 5/mo) but as Jerry posted, you need more income.
As Dave Ramsey would say, the bad news is you only make 12/hr. The good news is you could easily double your income. It was not easy, but while I was getting out of debt, I worked between 60 and 100 hours a week. One year I had 1 primary job and three part time jobs. Some days I would work one job for 12 hours, have 5 hours off(3 hours of sleep), then head to one of my part time jobs for a 5 hour shift, then to the 12 hour job again. I increased my income from 38k to 75k+ with this approach. All the extra income went to debt reduction.
The last 44 months I paid off $ 96,000.00. (during this time I also had $ 10,000.00/ year in child support)

I know it will be tough, but you have to break the cycle. Draw a line in the sand, and cut that credit card up. Once you do that, it will force you to be creative in your finances.

I needed help getting started after trying to get out of debt my way.
I started listening to the Dave Ramsey podcasts while at work, and decided to give it a try.
I got $ 1,000.00 beginner emergency fund, (the first time as an adult I had any savings. Everything always went to debt) and listed all of my debts, smallest to largest and paid off the smallest first and worked my way up. Forget about the interest rate, get mad at the debt, and get rid of it.

Mike, wow, that is amazing how much you paid off so quickly. I have been considering getting a second job to help reduce the debt faster, it’s just a small town so I’m going to have to find out who is hiring. I’m finding not everyone here posts their openings on their local newspaper’s classifieds page. I’m definitely not adverse to working extra hours.

I do have to put in an invoice with the lady for whom I did some research in the past so that will help, but of course, it’ll be on a 1099 basis so I need to put a good chunk of it aside for taxes, too.

I have cut up my credit cards in the past, and really want to get to that point again. The first step was the freezing move. I do have an emergency fund set up and it is labeled DO NOT TOUCH.

The reason I didn’t mention the Big DAddy Loan as the one who has to be repaid is I know its balance will grow exponentially with the new repayment plan. I say Exponentially with a huge, capital E. I never plan on making the same type of income again, so it’s very unlikely I won’t be paying that $91/month going forward for the next 25 years, and I’m ok with that. The rest of the debt, oh hell no, it’s going away.

I so appreciate your comment, Mike, especially for your honesty. Thank you so much.

Most part time jobs that I got were not posted anywhere. I just picked a place, went in and introduced myself and told them what I was looking for. If they did not have anything, I would ask them if they new anyone else. One time I applied to 15 different companies in two days. Got 14 turn downs. One came thorough and added to my income. I had one company who wanted a full time person, they had not considered hiring part time, but I sold them on the idea of hiring me part time because I did not need any benefits from them.

Hi Mike, that is my plan for tomorrow evening – go into a few places I think might be hiring, or are always kind of looking for people (grocery store, etc.) and ask them if they are hiring (or call them over my lunch hour tomorrow.) I would have done it tonight but had to get my sewer hose wrapped – I feel accomplished, I used heat tape and fiberglass insulation, and trash bags to keep the wetness out! I like your persistence – it shows in how much you accomplished in such a short time.

Question – did you call Dave Ramsey or show up in person to do your debt free scream? (I used to listen to him a lot.)

I considered calling into the Dave Ramsey show. But it is just not my style. Listening to the podcast 3 hours a night for inspiration was great. Hearing the debt free screams was amazingly inspirational. Continuous inspiration and motivation were the key for me. I am a numbers guy, I had everything on Quicken. As the debts, that were listed on the left hand side of the screen, were paid off, I would remove them. I remember the month I had a positive net worth for the first time, March 2011. It was a strange feeling. (I was saving up to make one final payment to my ex-father in-law of 15 years in June. That was not awkward at all.)
I have been full timing for a year this month.

Oh I know what you mean about hearing the debt free screams – it is definitely inspirational. I just didn’t always like Dave’s tone with some people, somewhat condescending. I mean, not every person who called was a rocket scientist of course, but still… I love how you put that “not awkward at all…”

Congrats on your first anniversary full timing! What kind of rig do you have?

Hi Terri:
Girl, I’ve always appreciated your transparency on your blog. You are an inspiration to us all.
Your budget is super tight. Congrats on having such a good handle on your finances. Increasing your income is the best you can do as already suggested. Cutting back doesn’t seem like a viable option.
You have many skills (writing, librarian, athletic trainer, caring for animals, lawyer, etc)…could any of these be used where you are? You have a fresh eye in the community and the benefit of living in a mega city. So is there a service or product that is lacking that you could provide? For example, if you found 4 clients who needed help with their pets for $25/client.
Think like an entrepreneur…even a small city there are needs.
If you need help selling on eBay…call me. I can help with that one.
Maybe you can create a product and sell it (ebook, course, etc)
Just my 2 cents 🙂
Wishing you well sis!

Yep, there are a lot of folks in this area who do pet sitting since there is literally no pet boarding or kennel thing in this town. In this town, with all of these animals??

I definitely plan on writing an ebook, or two, or three…. 🙂 And the budget is tight if I am always at the lower end of the payroll period. I don’t think that will happen but want to be prepared. Any little bit extra I make, is going toward the RV payment right now (and a bit to add to the emergency fund I already have in place.)

I have a 2015 Arctic Fox 22G with a generator that I pull with a 2005 Ford Expedition. I added solar and a 1500 watt inverter for boondocking. The inverter is enough to make coffee and run my guitar amp, and 4G internet booster off-grid. I also added a custom hitch to carry a dirt bike for exercise. I definitely learned a lot full timing my first year.

Oh, Arctic Fox are nice rigs!! And yes, that does sound like quite the powerful inverter you have there. I know I’m already learning a lot about RVS, just living (stationary) in mine. Not looking forward to the cold weather but I plan on putting up plastic on my windows. It’s why I am up early before work today, actually!